FY 2022 Spending Bill Includes Clarifications, Improvements to FAFSA Simplification Act

By Jill Desjean, NASFAA Policy & Federal Relations Staff

The omnibus spending package unveiled by congressional appropriators on Wednesday morning includes several changes to the FAFSA Simplification Act, which passed as part of last year’s appropriations bill in the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA).

Changes are largely technical, but include some wins for financial aid administrators and students as a result of successful advocacy efforts by NASFAA and others. 

The most significant detail is the change to the effective date of the FAFSA Simplification Act, from July 1, 2023 to July 1, 2024. The Department of Education (ED) indicated last year that the sweeping changes to the FAFSA and to the Federal Methodology formula could not be implemented in such a short time frame, and with this bill Congress officially amends the time frame in legislation to permit an additional year for implementation.

The effective date changes do not impact provisions that were already slated for early implementation, such as eligibility restoration for students who fail to register with the  Selective Service System or have certain prior drug convictions. They will also not impact the restoration of Pell Grant eligibility for incarcerated students slated for the 2023-24 award year, although ED must still issue final regulations by Nov. 1, 2022 for those to become effective on July 1, 2023. 

With the implementation date extension to 2024, Congress specifies certain provisions that ED may — but is not required to — adopt on time, in 2023. Those include the changes to professional judgment (PJ), including a prohibition on institutions having a policy of not performing PJ at all, provisional independent student status, and changes to the determination process for unaccompanied homeless youth.

Also eligible for on-time implementation are all provisions related to the cost of attendance (COA) components. The bill would permit ED to implement — as early as July 1, 2023 — the provisions of the FAFSA Simplification Act that prescribe parameters for how institutions determine living expense allowances in the COA. Included in this section are changes to current law that would now require schools to include the cost of first-time professional licensure or certification in the COA, which is currently an optional COA component. Notably, the bill does not designate the provision of the FAFSA Simplification Act that gives authority to ED to regulate COA as eligible for implementation on July 1, 2023, meaning that the general, new effective date of July 1, 2024 applies.

An important technical correction in the new legislation is one that will allow institutions to use either the actual or the average cost of loan fees in the COA. The FAFSA Simplification Act allowed for use of only actual loan fees, which would have been nearly impossible for institutions to do in practice. Another is a change to the Public Health Service Act, the authorizing legislation for the Health Professions Student Loans (HPSL) programs, which currently requires borrowers to be registered with the Selective Service System to qualify, but which this new legislation amends to remove the requirement to match the changes to Title IV student aid eligibility. 

While the provisions detailed here are noncontroversial, the bill is more than 2,000 pages long, leaving plenty of room for disagreement among lawmakers. However, Congress is expected to move quickly given pressures to keep the government open and with the need for a spending bill to be enacted before the current spending levels lapse after Friday March 11.


Publication Date: 3/10/2022

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